Commentary on Economics, Information and Human Action

What about electric bikes? and regular bikes? and can I get a pony?

President Obama’s budget request will call on Congress to pass legislation offering consumers a rebate of as much as $7,500 for purchasing electric vehicles.

The rebate plan is part of a three-part proposal outlined by the Department of Energy Tuesday that will be included in Obama’s budget request, slated to be released Monday. The proposal is designed to reach Obama’s goal of putting 1 million electric vehicles on the road by 2015.

The electric vehicles rebate proposal is modeled after the successful “cash-for-clunkers” program, which gave consumers rebates for exchanging older vehicles for more fuel-efficient ones.

1. Which “cash-for-clunkers” program was the successful one? They can’t be talking about thisone, can they?

2. Does “electric vehicles” include electric motorcycles and electric bikes, too? How about a golf cart so I can tool around the neighborhood like some of my neighbors do? And if electric vehicles can get a subsidy, why not non-electric bike purchasers?

3. Is this a plan to do something about local air pollution problems, so the rebates targeted to areas with local air pollution problems? Or are we going to squander taxpayer money wherever consumers want to put their electric vehicles, whether there are any local air pollution problems or not?

1- It put off a commute-length crisis, so there’s a $350/ton CO2 REC going someplace to market.
2-4 and comment- Oh no, they’re just making a condition for Goldman Sachs to redeem their QE bonds that they feed, stable, wash, walk and muck your pony. Which I am picturing freezing in sketchy Columbia University pasture, instead of Rice or Laredo University of Neutron Mines or wherever.

I suspect Prof. Giberson was being ironic, but, yes, electric golf carts have actually been deemed by the IRS to be covered by this line of subsidies. See, e.g., Cash for Clubbers (WSJ 2009).

Given the size of the subsidies, and the relatively inexpensive nature of golf carts, enterprising individuals have been able to get golf carts essentially for free, or even at a profit. What’s worse, there is no limit to the number of subsidized golf carts for any individual, so some have acquired small fleets at tax payer expense.

Yes, at least trying to be ironic, or actually probably sarcastic. But I’ve been thinking about getting a new bike, and presumably a manually-powered bike has less environmental impact than an electric bike which has less environmental impact than electric cars. If the government is willing to subsidize $7,500 for an electric car, why doesn’t it do us all a favor and buy me a $2,000 bike instead?